Sprint - Nextel 2010 Annual Report Download - page 106

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3. Investments
Investments as of December 31, 2010 and 2009 consisted of the following (in thousands):
Short-term
U.S. Government and Agency
Issues
Long-term
U.S. Government and Agency
Issues
Other debt securities
Total long-term
Total investments
December 31, 2010
Gross Unrealized
Cost
$502,121
—
8,959
8,959
$511,080
Gains
$ 198
—
6,292
6,292
$6,490
Losses
$(3)
—
—
—
$(3)
Fair Value
$502,316
—
15,251
15,251
$517,567
December 31, 2009
Gross Unrealized
Cost
$2,106,584
74,670
8,959
83,629
$2,190,213
Gains
$ 231
—
4,212
4,212
$4,443
Losses
$(154)
(154)
—
(154)
$(308)
Fair Value
$2,106,661
74,516
13,171
87,687
$2,194,348
For the years ended December 31, 2009 and 2008 we recorded an other-than-temporary impairment loss of $10.0 million
and $17.0 million, respectively, related to our other debt securities. No loss was recorded in 2010.
Other debt securities include investments in collateralized debt obligations, which we refer to as CDOs, supported by
preferred equity securities of insurance companies and financial institutions with stated final maturity dates in 2033 and 2034.
These are variable rate debt instruments whose interest rates are normally reset approximately every 30 or 90 days through an
auction process. As of December 31, 2010, the total fair value and cost of our security interests in CDOs was $15.3 million and
$9.0 million, respectively. The total fair value and cost of our security interests in CDOs as of December 31, 2009 was
$13.2 million and $9.0 million, respectively. We also own Auction Market Preferred securities issued by a monoline insurance
company which are perpetual and do not have a final stated maturity. In July 2009, the issuer’s credit rating was downgraded to
CC and Caa2 by Standard & Poor’s and Moody’s rating services, respectively, and the total fair value and cost of our Auction
Market Preferred securities was written down to $0. Current market conditions do not allow us to estimate when the auctions
for our other debt securities will resume, if ever, or if a secondary market will develop for these securities. As a result, our other
debt securities are classified as long-term investments.
The cost and fair value of investments at December 31, 2010, by contractual years-to-maturity, are presented below (in
thousands):
Due within one year
Due in ten years or greater
Total
Cost
$ 502,121
8,959
$ 511,080
Fair Value
$ 502,316
15,251
$ 517,567
Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
F-49